Single Family with Renter

[Daniel Foster]

I am looking at buying a single family with a renter already in it. I have requested the payment records and lease agreement. What else should I be looking for?

[Bill Gulley]

Besides the usual due diligence on the property side you need an estoppel letter from the tenant stating their understandings of the lease being the same as the lease agreement to ensure there have not been any modifications or promises expressed to the tenant. You need to make sure the tenant isn't under any impression of being entitled to any other rights or obligations, that payments are to be as agreed and the landlord didn't make any side agreements with them. It verifies the lease terms.

Need to look at the tenant application file to see who you are getting. Do they qualify, re-qualify them basically, verify employment for existing tenants assumed.

Verify utility history with utility providers to ensure the tenant has been there for the term indicated, there are scams by turn-key sellers, this verifies the tenant has really been there.

Review their payment record and any collection efforts.

The landlord needs to send the tenant a notice of sale, certified mail, return receipt requested. This may be required by law, if not it's a good practice as a tenant can send a payment off and you'll need to collect from a seller trotting off and a tenant refusing to pay twice.

Tenant wise, that's about all I'd do. Good luck :)